The Issue Whether Allstate Construction's (Allstate) bid was delivered in time. Whether Florida State University (FSU) had the authority to waive the lateness of Allstate's bid if it was late. Whether the failure by Allstate to acknowledge receipt of Addendum No. 2 was a bidding irregularity. Whether Allstate's failure to acknowledge receipt of Addendum No. 2 could be waived by FSU.
Findings Of Fact Florida State University requested bids for repairs to the roof and walls of Thagard Student Health Center on July 2, 1992. Thereafter, two addenda were issued. The first addendum was issued on July 27, 1992, and the second on July 28, 1992. Item #1 of Specifications in Addendum No. 1, which is attached, changed the date the bids were to be presented to August 6, 1992 at 2:00 p.m. in Room 124-D of Mendenhall Maintenance Building at FSU. Item #1 to Specifications in Addendum No. 2, which is attached, changed the specifications of ringlets and counterflashings published in Item #4 to Specifications in Addendum No. 1; and Item #2 in Addendum No. 2 changed the specifications of the materials in the cants published in the original specifications. On August 6, 1992, representatives of Harrell, Southeast, and FSU were present in Room 124-D, Mendenhall Maintenance Building prior to 2:00 p.m. Harrell and Southeast had already presented their bids to Sallie Dixon, FSU's representative. One of the persons present had called upon Ms. Dixon to call time and open the bids, but she had not done so when Dot Mathews and Joe O'Neil entered the room. Mr. O'Neil announced to those present that Ms. Mathews was late because he had misdirected her to another part of the building when Ms. Mathews's had entered the office he was in, Room 124, and had asked directions. Ms. Mathews immediately handed Allstate's bid to Ms. Dixon, and Ms. Dixon received it. Immediately, Ms. Dixon opened, tabulated, and posted the bids. Allstate had the lowest responsible bid. Allstate's bid did not acknowledge receipt of Addendum No. 2. FSU's rules on bidding provide that the official time will be that of the clock in the reception area of the Purchasing Department; however, the opening was held in Mendenhall Maintenance Building because of repairs to the Purchasing Department, and the university's officials were uncertain whether the reception area and clock existed at the time of the opening. It was the clear impression of all present, except Ms. Mathews, that the bid presented by Ms. Mathews was after 2:00 p.m. The estimates of the time varied, but none placed the time beyond 2:04 p.m. FSU generally sent an acknowledgment form with an addendum which required the bidders to acknowledge receipt of the addendum; however, in this instance, the addendum was sent by the supervising engineer, and an acknowledgment form was not sent with the addendum. The specifications did not require acknowledgment of addenda. The essence of the substantial amount of testimony received on the impact of the changes was (1) that the change in thickness of materials had a negligible impact, and (2) the real change in costs was the result of the requirement that the paint finish be by the manufacturer. The requirement that the materials be painted by the manufacturer was part of Addendum No.1. Further, the bidders are deemed manufacturers, and the finish that they put on the manufactured items is "by the manufacturer". Although testimony was received that Petitioner would have manufactured the items and then had them coated thereby increasing their total costs, an alternative method of manufacture was described by Allstate's representative in which the painted raw materials are retouched after being cut and welded into the finished structures. Petitioner's choice of the first method was explained by its representative to be its effort to comply with the bid requirement that the winning contractor guarantee the finish for twenty years. Intervenor's choice was to use the second method. To the extent that one method may have been more expensive that the other, there was no prohibition of the Petitioner to adopt the less expensive method; and, therefore, there was no economic advantage to Allstate. In the absence of an economic advantage to Allstate, Allstate's failure to acknowledge Addendum No. 2 was a minor irregularity. FSU waived the lateness of Allstate's bid and Allstate's failure to acknowledge Addendum No. 2, and awarded the bid to Allstate.
Recommendation Based upon the consideration of the facts found and the conclusions of law reached, it is, RECOMMENDED: That the Petitioner's Petition be dismissed, and the bid be awarded to Allstate Construction, Inc. DONE and ENTERED this 30th day of October, 1992, in Tallahassee, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of October, 1992. APPENDIX CASE NO. 92-5465BID Florida State University and Allstate Construction, Inc. submitted proposed findings which were read and considered. The following states which findings were adopted and which were rejected and why: Florida State University's Proposed Findings: Para 1-4 Adopted. Para 5-7 Not necessary/irrelevant. Para 8 Adopted. Para 9-11 Not necessary/irrelevant. Para 12-24 Adopted. Para 25 Not necessary/irrelevant. Allstate Construction's Proposed Findings: Para 1,2 Adopted. Para 3 Not necessary/irrelevant. Para 4-8 Adopted. Para 9 Not necessary/irrelevant. Para 10-15 Adopted. COPIES FURNISHED: Wendell Parker Mike Harrell Harrell Roofing, Inc. P.O. Box 20421 Tallahassee, FL 32316 Sonja Mathews Florida State University 540 W. Jefferson Street Tallahassee, FL 32306-4038 Davisson F. Dunlap, Jr. 3375-A Capital Circle, N.E. Tallahassee, FL 32308 Jeff Miller Route 16, Box 1307 Tallahassee, FL 32310 Dale W. Lick, President Florida State University 211 Westcott Building Tallahassee, FL 32306-1037 Gerold B. Jaski, General Counsel Florida State University 540 West Jefferson Street Tallahassee, FL 32306
Findings Of Fact The Department of Health and Rehabilitative Services currently leases approximately 22,000 square feet of space from Nelson P. Davis. The space is contained in two separate buildings, both located at 417 Racetrack Road, Ft. Walton Beach, Florida. The Department and Davis were involved in a legal dispute involving the currently leased premises, which concluded in 1986 with the entry of judgment in Davis' favor. While some antagonism remains between the parties related to the legal action instituted by Davis, Davis has been an acceptable landlord in all other respects. The current lease expires February 1, 1989. Davis has been aware, since late February or early March of 1988, that the Department would need space in excess of the currently occupied 22,000 square feet, but was not aware of the actual additional space requirements until the issuance of the invitation to bid. In general, the Department's space requirements have increased annually. In response to the anticipated need for additional space, Davis initiated plans for design of a third Racetrack Road building that could meet the additional need, but did not construct the facility. In response to the space requirements of previous years, Davis has constructed additional space. The Department has occupied the additional space in such proportions as to avoid the competitive bidding process, however, the current need for additional space exceeds the maximum which can be leased without competitive bidding. The Department on May 11, 1988, issued an invitation to Bid for approximately 26,165 square feet of space in Ft. Walton Beach, Florida. (HO #1) In response to the invitation, Davis submitted a bid proposal. The Davis proposal, the sole proposal received by the Department, was disqualified by the Department as non-responsive. On June 23, 1988, the sole bid was opened by Joseph Pastucha, HRS District One Facilities Manager, who initially reviewed the Davis bid. Mr. Pastucha identified items of concern related to the responsiveness of the bid and then provided the information to his supervisor, who in turn provided the information to Mr. James Peters. The Department did not contact Davis for further information or to provide the opportunity to correct any defects. James Peters, HRS's District One Manager for Administrative Services has expressed on at least one occasion a desire to avoid entering into business arrangements with Nelson P. Davis. The bases for Peters' opinion is the earlier litigation between the parties. Peters was on the committee which was to have evaluated bids submitted in response to the invitation. However, Peters has stated that his personal opinion would not influence his participation in the bid solicitation process. The evidence did not indicate that Peters based his opinion regarding the Davis bid submission solely on the earlier litigation or that any other person involved in the agency's action permitted personal opinions to affect the decisional process. Davis' bid proposal included the two buildings constituting approximately 22,000 square feet located at 417 Racetrack Road which the Department currently occupies, plus a third building of approximately 4,000 square feet. The proposed square footage and lease cost were acceptable. The third building was to be either a planned, unconstructed building located at the 417 Racetrack Road location or an existing building located "7/l0ths of a mile southeast of the present HRS offices," (the off-site building). However, a memorandum attached to Davis' submission stated that he did not intend to use the off-site building for HRS purposes, (HO #2). Further, Davis had previously indicated in conversation with the HRS manager of the 417 Racetrack Road offices that he planned to utilize the off-site space otherwise. On page one of the bid submittal form Davis indicated the address of the proposed location as 417 Racetrack Road. By letter dated July 5, 1988, the Department notified Davis that his bid offering was deemed non-responsive and that the Department expected to readvertise for space in Ft. Walton Beach. The letter made no mention of any opportunity to protest the determination. The statement, "[f]ailure to file a protest within the time prescribed in Section 120.53(5), Florida Statutes, shall constitute a waiver of proceedings under Chapter 120, Florida Statutes," which is required to be included in the notice of agency decision by Section 120.53(5)(a), Florida Statutes, was omitted by the Department. (HO #3) On or about July 7, 1988, Davis contacted the Department of General Services to express his dismay regarding the disqualification of his submittal. A meeting, held on or about July 19, 1988, between Davis and Department representatives, did not alter the Department's position. On or about July 25, 1988, the written notice of protest and request for hearing was filed. The Department forwarded the request to the Division of Administrative Hearings. The letter dated July 5, 1988, advising Davis that his bid was deemed non-responsive enumerated five reasons for the Department's decision. The reasons stated were: No photograph of the proposed facility was submitted as requested; No floor plan of the facility was submitted as requested; A substituted site was submitted Proposed space was not an existing building and was not measurable; Three buildings in bid proposal constitute three locations and are unacceptable. The letter was signed by Chuck Bates, DHRS Deputy District Administrator, District One. The letter was drafted by James Peters. (HO #3) Mr. Bates relied upon Peters and Pastucha to provide information sufficient to justify the disqualification of the bid, and was satisfied that the action was justified prior to signing the letter. Examination of the bid submittal package reveals that Davis failed to acknowledge by initial the requirements of page seven, but that he did, on that page, appropriately respond to questions related to proposed parking spaces being bid. The Department did not base the disqualification of the bid on the failure to acknowledge the page and did not include the failure to initial the page in the stated reasons for deeming the bid non-responsive. Paragraph 9(a) of the bid submittal form requires the submission of a clear photograph of the exterior front of the building. (HO #2) Davis submitted no photographs. Paragraph 9(b) of the bid submittal form requires the submission of a scaled floor plan showing present configurations with measurements. (HO #2) Davis submitted floor plans for the proposed-to-be-constructed building and for the off-site building, but failed to submit floor plans for the two buildings which the Department currently occupies. The bid also failed to include calculations of net rentable square footage related to the omitted floor plans. The letter to Davis stated that an additional reason for disqualification of his bid from further consideration was the submission of a substituted site, (HO #3). The "substituted site" refers to Davis' inclusion of the off-site building not identified in the bid submission other than by the statement that the building was located seven-tenths of a mile southeast of the present HRS office location. No map, street address, legal description, or other identifying information was submitted. The proposal submitted by Davis included plans to construct a third building at 417 Racetrack Road, which was rejected as not measurable. The invitation to bid states that to be considered, the space must be existing, dry and physically measurable, at the time of bid submitted. (HO #1) The proposed third building clearly fails to meet this requirement. While the Department may permit the correction of minor deficiencies, the deficiencies were adjudged by the Department to be more than minor. The proposal's inclusion of nonexisting space (Racetrack Road building #3) or in the alternative a building, the location of which can not be determined from the bid information and which the bidder apparently intends not to provide, is non- responsive to the specifications of the invitation. As to the fifth enumerated reason for disqualification of the bid (three buildings/three locations) the Department and Petitioner presented extensive testimony related to paragraph 3(b) of page 15 of the bid submittal form. Page 15 of the bid submittal form is titled "Evaluation Criteria" and contains a list of weighted factors which were to be used in the evaluation of bids. (HO #2) Paragraph 3(b) states, as one factor for consideration in evaluation, whether the bid provides for the required aggregate square footage in a single building, and continues, "[p]roposals will be considered, but fewer points given, which offer the aggregate square footage in not more than two locations provided the facilities are immediately adjacent to or within yards of each other." (HO #2) The space left for the specification of maximum yardage was erroneously left uncompleted by the Department and the Department did not learn of the error until the bid was submitted. The Department's disqualification of the bid on this basis relies on the Department's assertion that the three buildings included in the Davis proposal constitute three locations and that a responsive bid may contain not more than two locations. The Department's position is that "location" and "building" are synonymous and that paragraph 3(b) of the evaluation criteria prohibits consideration of a bid submission including more than two buildings. The Department's position is rejected as arbitrary. The bid package does not state that proposals including more than two buildings will be disqualified. The sole reference to the number of buildings in a responsive bid submission is as stated and contained on the page of "Evaluation Criteria", wherein it is identified with a weighting factor of five percent of total possible points.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Department of Health and Rehabilitative Services enter a Final Order dismissing Case No. 88-3868BID. DONE and ENTERED this 28th day of September, 1988, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of September, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-3868BID The following constitute rulings on the proposed findings of fact submitted by the parties. Petitioner: Accepted in part. The use of the word "required in the fourth sentence is rejected. The referenced section relates to evaluation factors, not specific requirements. Accepted. Accepted in part. The third building was proposed as either the off-site building or the planned, non-existent space. Accepted. Accepted. Accepted. Rejected as restatement of testimony. Other testimony indicated that Petitioner planned to use the off-site location for non-HRS purposes. Rejected, immaterial. Accepted. Accepted. Accepted as modified. Accepted in part. The use of the word "technical" is rejected. Accepted. Accepted as modified. Accepted as modified. Accepted. Accepted. Accepted. Accepted as modified. Accepted as modified. Accepted as modified. The change between the two invitations to bid was to clarify the obvious confusion related to the use of terms "location" and "building" and was made not to the bid specifications but to evaluation criteria. Rejected as restatement of testimony. Rejected, conclusion of law. Accepted so far as relevant. While the Davis bid was disqualified as non-responsive, the right to reject any and all bids encompasses the disqualification of a bid as non-responsive to the specific requirements of an invitation to bid. Respondent: Rejected, conclusion of law. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Rejected. Floor plan of the off-site building was submitted showing that the building is essentially a hollow, box-like structure. Accepted. Accepted. Accepted. Rejected, irrelevant. While the usual distance may be 100 yards, the actual bid specifications do not state such. Further the sole reference to the distance between "locations" was contained in evaluation criteria. At no time prior to the June 23, 1988 bid opening did the Department attempt to identify the preferred distance between locations. Accepted. Accepted. Accepted. COPIES FURNISHED: Bruce A. McDonald, Esquire Post Office Box 887, Suite 105 151 Mary Esther Cutoff Mary Esther, Florida 32569 Rodney M. Johnson, Esquire Acting District One Legal Counsel Post Office Box 8420 Pensacola, Florida 32505-8420 Joseph J. Pastucha 3300 North Pace Boulevard Room 109 Town & Country Plaza Pensacola, Florida 32505 Jan Kline 417 Racetrack Road Ft. Walton Beach, Florida 32548 James V. Peters Department of General Services 160 Governmental Center Fourth Floor, Room 412 Pensacola, Florida 32501 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Tom Batchelor Staff Director House HRS Committee The Capitol Tallahassee, Florida 32399-1300
Findings Of Fact In 1985, the Florida Legislature created a state satellite telecommunications network, and directed the Department to develop an implementing plan and coordinate this network, including purchasing the equipment and installing the system. This system would be for educational purposes and business teleconferencing, and would consist primarily of satellite receiving stations at 28 existing educational institutions throughout the state. The Department drafted the technical specifications for the equipment to be utilized in the system in consultation with a generally recognized expert in the field of telecommunications. When these specifications were finalized, the Department issued an Invitation to Bid on February 14, 1986. Subsequently, the Department modified the original bid specifications by relaxing some of the requirements, in order to increase the number of vendors capable of providing the equipment. An addendum was issued on March 5, 1986, and another was issued on March 17, 1986. Satellite was on the bidder list and it received a copy of the initial Invitation to Bid, but it did not submit a bid in response to either the initial invitation or to the March 5 addendum. Satellite did, however, compile its bid and submitted it in response to the March 17, 1986, addendum. In all, six companies submitted bids to the Department, including Microdyne whose bid was accepted. Satellite's bid and three others were rejected, and one bid was disqualified because it was not signed. The amount of the Microdyne bid was $569,509. Although the amount of the Satellite bid was $372,550, the Department rejected it because it was not in compliance with the Invitation to Bid and the specifications as amended by the addenda. Section 2.8 of the bid specifications requires that the award be given to the lowest bidder meeting specifications. The Satellite bid was rejected for the following reasons: The survival wind speed of the 5.0 meter dish offered by Satellite was 105 miles per hour. Section 4.4.2 of the bid specifications requires survival at 125 miles per hour. No operational wind speeds were specified by the Satellite bid, as required by Section 4.4.2 of the bid specifications. The ku band feed cross-polarization rejection that was offered by the Satellite bid was 25 decibels. Section 4.4.4 of the bid specifications requires 30 decibels. The receiver specified by the Satellite bid did not include a one- half transponder mode. Sections 4.5.2 and 4.6.1 of the bid specifications require one-half transponder reception on the ku band. The bid submitted by Satellite did not comply with the requirements of the bid specifications for the reasons described in the previous paragraph. The Microdyne bid was in substantial compliance with these specifications. The requirements as specified by the Department which Satellite's bid did not comply with are substantial and material requirements for the system proposed by the Department.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the protest of Satellite Television Engineering, Inc., to Bid No. 85-54 be DISMISSED. This Recommended Order entered this 11th day of August, 1986 in Tallahassee, Florida. WILLIAM B. THOMAS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 11th day of August, 1986. COPIES FURNISHED: Mr. Richard A. Lotspeich Post Office Box 271 Tallahassee, Florida 32302 Joseph L. Shields, Esquire Knott Building Tallahassee, Florida 32301 Paul Watson Lambert, Esquire J. Riley Davis, Esquire Post Office Box 11189 Tallahassee, Florida 32302 Honorable Ralph D. Turlington Commissioner of Education The Capitol Tallahassee, Florida 32301 Judith Brechner, Esquire General Counsel Department of Education Knott Building Tallahassee, Florida 32301
The Issue Whether the decision by the State of Florida, Department of Corrections (DOC) to reject all bids received in response to Request For Proposal 93-RIVHSD- 075 (RFP) was arbitrary, capricious, fraudulent, illegal or dishonest. Additionally, Intervenor challenges Petitioner's standing to bring this proceeding since Bio-Medical Applications, Petitioner's wholly-owned subsidiary corporation, submitted the bid at issue and because Petitioner would not be a party to any contract awarded pursuant to the RFP.
Findings Of Fact Standing In its response to the Request For Proposal at issue in this proceeding, Bio-Medical Applications of Florida, Inc. (BMA) provides the following regarding vendor name and address: Vendor Name: Bio-Medical Applications of Florida, Inc. Vendor Mailing Address: c/o National Medical Care, Inc. 1601 Trapelo Road Walthem, Massachusetts 02154 In the bidder acknowledgment and ownership interest portion of its response to the RFP, BMA disclosed the following: ... This bid is presented in good faith without collusion or fraud and Ernestine M. Lowrie, as signer of the bid from Bio-Medical Applications of Florida, Inc. has full authority to bind as the principal bidder. All stock of Bio-Medical Applications of Florida, Inc. is held by Bio-Medical Applications Management Company, Inc. and all the stock of the latter corporation is held by National Medical Care, Inc., 1601 Trapelo Road, Walthem, Massachusetts 02154. All of the stock of National Medical Care, Inc. is held by W. R. Grace and Company. The Dialysis Services Division of National Medical Care, Inc. (NMC) is the largest division of NMC. In each state in which NMC has an interest in dialysis services operations, Bio-Medical Applications is organized as a corporate entity and is part of the Dialysis Services Division of the parent corporation, NMC. Petitioner in this proceeding, NMC, is not currently organized and registered as a corporation under the laws of the State of Florida. At the final hearing in this case, NMC's representative testified that he was not aware that NMC was registered to do business in the State of Florida but thought NMC had been operating in Florida for about 20 years. BMA is wholly owned by NMC. The Respondent agency originally expressed its intent to award the contract at issue to BMA. NMC has a substantial interest in the RFP and the contract at issue, therefore, its substantial interests will be affected by the agency's proposed action to reject all bids. NMC has alleged that the agency's decision to reject all bids was arbitrary, illegal, dishonest, and fraudulent. Further, Petitioner also contends that the agency decision to reject all bids, after BMA's bid proposal has been disclosed to competitors, undermines the competitive purpose of the bid process. The Request for Proposal On August 27, 1993, the DOC issued RFP No. 93-RIVHSD-075. The RFP requested bidders to submit bids for a contract to perform peritoneal dialysis and hemodialysis treatment at the Department's Broward Correctional Institution and its South Florida Reception Center. The RFP required that bid proposals be filed with the DOC by September 30, 1993. The RFP provided that a bidder would receive up to 50 points for its price proposal and up to 50 points for its qualitative proposal for a total of 100 possible points. The RFP also provided that the DOC reserved the right to reject all bids when the DOC determined it was in its best interest to do so. The Bid Evaluation Upon initial review of the proposals submitted in response to the RFP, the DOC originally calculated that Petitioner's subsidiary, BMA, had received 49 out of 50 possible points from its price, as well as qualitative proposal for a total of 98 points. On October 22, 1993, the DOC sent written notice to all proposers of its intent to award the contract to National Medical Care, Inc. (Petitioner). At the time it mailed its notice of intent, the DOC believed that the difference between the Bio-Medical and the lowest price proposal (received by HealthInfusion) was $156,780 over the five year term of the proposed contract. HealthInfusion and an additional disappointed bidder filed protests contesting the DOC's notice of intent. Based upon input from the protestors, the DOC learned that it had miscalculated the cost of Bio-Medical's proposal. When the DOC corrected its initial error in calculation, BMA's proposal was $340,000 higher over the first three years of the proposed contract and $972,000 higher than the lowest bidder for the entire five year contract term. The Decision to Reject All Bids On November 24, 1993, the DOC notified all bidders of its intent to reject all bids. In addition to the initial miscalculation of price in the bid, the DOC discovered what it considers to be other irregularities in the evaluation in this case. BMA was the existing provider at the time the RFP issued. The bid evaluators worked closely on a day to day basis with Petitioner's employees. The DOC believes the evaluators preferred that Petitioner be awarded the contract and that the evaluators were not objective. During the process of evaluation, the evaluators were provided a letter from a party representing one of the bidders which contained allegations regarding negative background information on other bidders. The DOC believes that the letter should not have been given to the evaluators and that access to the letter further affected the evaluator's ability to be objective. Admitted Facts NMC and the Respondent DOC filed a Prehearing Stipulation in which the following facts are admitted by those parties: The DOC issued Request for Proposal No. 93-RIVHSD-075 ("RFP"). The RFP requested bidders to submit bids for peritoneal dialysis and hemodialysis treatment at Broward Correctional Institution and South Florida Reception Center. Bid proposals had to be filed with the DOC by September 30, 1993. On November 24, 1993, the Department notified all bidders of its intent to reject all bids. The Department rejected all bids due to significant irregularities in the bid evaluation process and the price difference between the winning bid and the low bid was too great. (Emphasis supplied.) On December 3, 1993, National Medical Care, Inc. filed its notice of intent to protest the DOC's decision to reject all bids. On December 13, 1993, National Medical Care, Inc. filed its formal written bid protest. Burden of Proof Petitioner has failed to prove, by the preponderance of evidence, that the DOC acted arbitrarily, illegally, fraudulently or dishonestly in making its decision to reject all bids.
Recommendation Based upon the foregoing, it is RECOMMENDED that the Respondent enter a final order dismissing NMC's protest of its decision to reject all bids in response to request for Proposal No. 93-RIVHSD-075. RECOMMENDED this 16th day of March, 1994, at Tallahassee, Florida. JAMES W. YORK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of March, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-7111BID The following constitute specific rulings, pursuant to Section 120.59(2), Florida Statutes, upon the parties' respective proposed findings of fact (PFOF). Petitioner's PFOF: Petitioner's PFOF 1 is adopted in paragraph 8 of the Recommended Order (RO). Petitioner's PFOF 2 is adopted in paragraph 9 of the RO. Petitioner's PFOF 3 is hereby adopted. Petitioner's PFOF 4 is hereby adopted. Petitioner's PFOF 5, to the extent not conclusory, is adopted in paragraph 1 of the RO. Petitioner's PFOF 6 is hereby adopted. Petitioner's PFOF 7 is adopted in paragraph 2 of the RO. 8-9. Petitioner's PFOFs 8 and 9 are hereby adopted. Sentence 1 of Petitioner's PFOF 10 is hereby adopted. Sentence 2 of this proposed finding is rejected as conclusory. Petitioner's PFOF 11 is adopted in paragraph 14 of the RO. 12-14. Petitioner's PFOFs 12, 13 and 14 are hereby adopted. Petitioner's PFOF 15 is adopted in paragraph 2 of the RO. Petitioner's PFOF 16 is hereby adopted. Petitioner's PFOF 17 is adopted in paragraph 26 of the RO and is a fact, in effect, stipulated to by Petitioner and Respondent. Petitioner's PFOF 18 is adopted in substance in paragraph 21. To the extent not adopted in the RO, the remainder of Petitioner's PFOF 18 is hereby adopted. Petitioner's PFOF 19 is adopted in paragraph 13 of the RO. Petitioner's PFOF 20 is adopted, in substance, in paragraph 16 of the RO. 21-24. Petitioner's PFOFs 21-24 are hereby adopted. Petitioner's PFOF 25 is rejected as a conclusion. Petitioner's PFOF 26 is rejected as conclusory and argumentative. This proposed finding is also irrelevant based upon facts admitted by Petitioner. Petitioner's PFOF 27 is rejected as irrelevant based upon facts admitted to by Petitioner. 28-34. Petitioner's PFOFs 28-34 are hereby adopted to the extent relevant. Based upon Petitioner's admission that the Respondent rejected all bids based on "significant irregularities," these proposals are for the most part irrelevant and unnecessary to the conclusions reached. 35. Petitioner's PFOF 35 is hereby adopted. 36-39. Petitioner's PFOFs 36-39 are adopted. 40-44. Petitioner's PFOFs 40-44 are cumulative and not necessary to the conclusions reached. Respondent's PFOF: 1-19. Respondent's PFOFs 1-19 are adopted in the RO. 20. Respondent's PFOF 20 is rejected as conclusory. 21-22. Respondent's PFOFs 21 and 22 are adopted in the RO. 23. Respondent's PFOF 23 is rejected as argument. 24-26. Respondent's PFOFs 24-26 are adopted in the RO. 27. Respondent's PFOF 27 is rejected as conclusory. 28-29. Respondent's PFOFs 28 and 29 are adopted in the RO. 30-32. Respondent's PFOFs 30-32 are rejected as conclusions and argument. Respondent's PFOF 33 is hereby adopted. Respondent's PFOF 34 is rejected as argument. Intervenor's PFOF: 1-21. Intervenor's PFOFs 1-21 are adopted in substance in the RO. Intervenor's PFOF 22 is adopted, in substance, in paragraph 4 of the RO. Intervenor's PFOF 23 is hereby adopted. Intervenor's PFOF 24 is adopted in substance. Intervenor's PFOF 25 is hereby adopted. However, Intervenor has failed to prove that the activity of NMC is not within one of the several exceptions to the requirements of Section 607.1501, Florida Statutes. COPIES FURNISHED: Seann M. Frazier, Esquire Jennifer Kujawa-Graner, Esquire PANZA, MAURER, MAYNARD & NEEL, P.A. 3081 East Commercial Avenue Fort Lauderdale, Florida 33308 R. Beth Atchison, Esquire Department of Corrections 2601 Blair Stone Road Tallahassee, Florida 32399-2500 Timothy G. Schoenwalder, Esquire BLANK, RIGSBY & MEENAN, P.A. 204-B South Monroe Street Tallahassee, Florida 32301 Harry K. Singletary, Jr. Secretary Department of Corrections 2601 Blair Stone Road Tallahassee, Florida 32399-2500
The Issue This case concerns a challenge to the validity of Rules 13A-1.001(12), 13A- 1.002(1)(b) and 13A-1.002(3) , Florida Administrative Code, pursuant to Section 120.56, Florida Statutes.
Findings Of Fact In the fall of 1988, the State of Florida, Department of Transportation (DOT) put out a Request for Proposals (RFP) as RFP-DOT-88-0l. Through this RFP the agency sought to acquire a new barrier and ticket toll collection system which would automate the toll collection operations and retrieval of audit data, having in mind increased reliability and performance. The project is principally one which envisions the purchase of commodities. It has an associated service component. Section 287.062(1)(e), Florida Statutes together with Section 287.073(3), Florida Statutes, established the basic authority for the award of RFP-DOT-88-01. The agency received responses in March, 1989, from three companies. The offerors were Petitioner and Intervenor and one other concern. The other company was AGS Informations, Inc. (AGS). Following evaluation DOT determined on May 18, 1989 to reject the Intervenor's proposal as nonresponsive. This rejection was followed by the Intervenor's notice of protest on Nay 25, 1989. A formal written protest was made on June 6, 1989. On July 31, 1989, Intervenor filed a notice of voluntarily dismissal of the formal written protest. This was addressed by the DOT final order of August 2, 1989 which dismissed the formal written protest. On November 21, 1989, DOT posted its intent to award a contract to Petitioner. This statement of intent to award was met by a notice of protest filed by Intervenor on November 27, 1989, followed by a formal written protest on December 6, 1989. The case was sent to the Division of Administrative Hearings for consideration and through response to a motion to dismiss the Hearing Officer in that case, DOAH Case NO. 89-6926B1D, entered a recommended order of dismissal. On January 22, 1990 DOT entered a final order dismissing Intervenor's petition and stating its intent to award the contract to Petitioner. An amendment to the January 22, 1990 order was made on February 21, 1990 reminding all concerned that the contract award was subject to review and approval by the Governor and Cabinet sitting as the State of Florida, Department of General Services to decide the propriety of the subject purchase which was an information technology resources purchase under Section 287.073, Florida Statutes. On February 21, 1990, DOT sent notice to the three offerors that it was rejecting all proposals submitted. As described in the notice of agency decision, DOT was operating on the basis that a further review of the proposals revealed that the proposals by AGS and Intervenor were nonresponsive. It went on to say that to have competitive offerors there must be two or more offers submitted by responsive and qualified offerors. In this instance DOT felt that it did not have two acceptable proposals and did not have a competitive offer. Because the commodities sought were available from more than one source, it had decided to withdraw its notice of intent to award which was contingent upon the approval of the Governor and Cabinet. On February 27, 1990, Petitioner gave a notice of protest of the DOT decision to reject all bids. This was followed by a formal written protest on March 9, 1990. Although the decision to reject all proposals was not opposed by Intervenor, the motion by the Intervenor to intervene in DOAH Case No. 90- 1583BID was granted allowing limited participation in support of the DOT decision to reject all proposals. That outcome tended to create the opportunity for Intervenor to participate in any re-advertisement for proposals. As revealed in the final hearing in DOAH Case No. 90-1583BID, DOT utilizes Chapter 13A, Florida Administrative Code, in the procurement process. Intervenor participated in the final hearing in DOAH Case NO. 90- 1583BID. The DOT decision to reject all proposals in which reliance upon the rules under challenge are perceived to support that decision has an adverse impact on Petitioner. By that arrangement Petitioner loses the opportunity for the contract. Additionally, it is placed in a disadvantaged position in that the particulars of its method of responding to the RFP have been revealed and are now known to the competitors who might be expected to utilize that information in a setting where a re-advertisement takes place. Under the circumstances, Petitioner filed its challenge to the existing rule on March 28, 1990. Intervenor sought the opportunity to intervene in this case on April 4, 1990, and that opportunity was granted on April 6, 1990. Intervenor intends to participate in any re-advertisements of the RFP. In his testimony at hearing William Monroe, Director of the Division of Purchasing for Respondent, established that in governmental purchasing the terms "offers" and "proposals" are synonymous. This opinion is accepted. Mr. Monroe also established that Respondent believed that it was implementing Section 287.012(15), Florida Statutes, when promulgating Rule 13A- 1.001(12), Florida Administrative Code. Through the promulgation of Rules 13A- 1.002(1)(b), and 13A-1.002(3), Florida Administrative Code, Respondent believed that it was implementing Section 287.062, Florida Statutes. Respondent interprets Section 287.062, Florida Statutes, to require an agency making a commodity purchase to use competitive sealed proposals in instances where invitations to bid are not used. Mr. Monroe in speaking for Respondent indicated that this interpretation gained support from the language set out in Section 287.001, Florida Statutes. According to Mr. Monroe the circumstance in which less than two responsive and qualified offerors respond to an RFP is one in which the procuring agency must reject all proposals or seek the approval from Respondent to negotiate with the one responsive offeror or where no responsive offerors were received to negotiate with someone whom the agency has chosen. Likewise, a sole source purchase negotiation must be approved by Respondent. Mr. Monroe's testimony, in speaking for Respondent, indicates that Respondent interprets the terminology within Section 287.062(2), Florida Statutes, "no competitive" to modify the words "bids" and "proposals." Thus, it is incumbent upon an agency to receive authority to negotiate in those instances where it receives less than two proposals submitted by responsive and qualified offerors who are responding to a RFP in acquiring commodities.
Findings Of Fact On March 19, 1985 petitioner, Michael Scott Symons, became employed as a financial manager with the brokerage firm of Easter Guthmann & Kramer Securities, Inc. (EGK) at 7200 West Camino Real Street, Suite 200, Boca Raton, Florida. In connection with his employment Symons filed an application for registration as an associated person of EGK with respondent, Department of Banking & Finance, Division of Securities (Division). The application was received by the Division on or about March 19, 1985 and was deemed to be complete on April 18, 1985. On that portion of the application entitled "Personal History" Symons gave 5700 Grillet Place, S.W., Fort Myers, Florida 33907 as his home address. He identified EGK's address as being 7200 West Camino Real, Suite 200, Boca Raton, Florida 33433. Although Symons signed the application he stated that EGK had actually submitted the application on his behalf since it was a common practice for brokerage firms to do administrative work on behalf of their employees. This is consistent with an agency rule (3E-600.02(3), F.A.C.) which requires that a securities dealer file and countersign the application for registration on behalf of an associated person. On March 24, 1985, or shortly after he began employment with EGK, Symons moved into an apartment at 6091 Boca Colony Drive, Boca Raton, Florida 33427. Approximately one month later, he began renting Post Office Box 3299 in Boca Raton. Symons did not inform the Division of these changes in address, or otherwise amend his application. On or about July 12, 1985 a Division bureau chief spoke by telephone with the chief financial officer of EGK and asked if EGK would voluntarily withdraw Symons' application. Later that same day, an EGK vice-president telephoned the bureau chief and advised him the firm would not withdraw the application. On July 16, 1985, the Division prepared and dated an Order Denying Application for Registration as an Associated Person. The next day a Division attorney sent a copy by certified mail to Symons' at 5700 Grillett Place, S.W., Fort Myers, Florida. Because Symons' wife had previously provided the post office with a change of address form the envelope containing the order was forwarded from Fort Myers to Post Office Box 3229 in Boca Raton. Certified mail notices were thereafter placed in the box on July 24 and July 31. However, the mail was never claimed. On August 8, 1985 the envelope was returned to the Division. It was received in Tallahassee on August 12, 1985. There is no evidence that Symons was aware the order had been mailed or that he deliberately failed to claim the letter. The agency attorney similarly assumed that Symons had not received a copy. Accordingly, it is found that at this point in time Symon had no knowledge that the July 16 order-was entered, and had been mailed to him in Fort Myers and Boca Raton. On August 19, 1985 the Division attorney again sent a copy of the July 16 order by certified mail to 7200 West Camino Real, Suite 200, Boca Raton. This was the address of EGK. According to the attorney, it was her intention to mail the order to Symons, and not his employer. The order contained the following pertinent language on page 5: Respondent is advised that Respondent may request a hearing to be conducted in accordance with the provisions of Section 120.57, Florida Statutes. A request for such hearing must comply with the provisions of Rule 28-5.201, Florida Administrative Code, and must be filed within twenty-one (21) days after receipt of this order. Otherwise, Respondent will be deemed to have waived all rights to such hearing. The certified mail receipt for the envelope containing the order was apparently signed for by Charlie Shields, an EGK employee. 1/ It eventually reached the desk of EGK's chief financial officer, James Weber, in an unopened envelope on August 23, 1985. Weber opened the envelope and read the enclosed order. He noticed on page five of the order that there was a twenty-one day time frame in which an appeal of the agency denial could be made. Believing that the twenty-one day time frame began on July 16, Weber erroneously concluded that the time to request a hearing had already expired. This was probably because he had never before seen a denial order, and was not familiar with the procedures under Chapter 120, F.S. Weber then showed the order to Edward Guthmann, a principal and vice- president of EGK. Guthmann telephoned an out- of-state attorney seeking advice on how to proceed, and sent a copy of the order to the attorney on August 23. The attorney did not take any action, and returned the order to Guthmann on an undisclosed dated between late August and the middle of September. On September 17 Weber "came to the realization" that under any interpretation of the order the time frame in which to request a hearing had run. He then contacted petitioner's present counsel on September 17 to discuss obtaining legal representation for Symons. Symons has continued using that counsel since that time. A petition for hearing was eventually filed with respondent on October 1, 1985. This petition was denied by agency order entered on October 16, 1985 on the ground Symons had "constructive receipt and notice of the Denial Order at the time of its delivery by U.S. Certified Mail to Respondent's personal address on July 24 1985, and furthermore, deems Respondent to have received actual notice. . . on August 25, 1985, when the Denial Order was claimed and signed for at EGK's address as listed on the application." Neither Weber or Guthmann informed Symons prior to September 15 that they had received the Division order, or that the document even existed. They also did not advise him that they had contacted an out-of-state attorney in August in an effort to obtain advice. In this regard, petitioner had not authorized them to take any action with respect to the denial order, or to seek the advice of an attorney. Symons was unaware of the existence of the denial order prior to September 20, 1985 when he was shown a copy of the order by his employer. Had he been aware of the order prior to September 15, he would have filed a request for a hearing. Even though he did not specifically voice an objection to his employer opening his mail, Symons did not expressly authorize his employer to accept the order or any other notices from respondent. Indeed, Symons considered certified mail to be "a personal thing," and something that "an employer has (no) right to open."
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered finding that petitioner timely requested an administrative hearing to contest respondent's denial of his application for registration as an associated person. DONE and ORDERED this 4th day of December, 1986 in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of December, 1986.
Findings Of Fact At some time prior to August 2, 1984, DOT issued bid blanks for a mini- contract for State Project No: 76020-3515, for work consisting of cleaning and guniting a concrete box culvert located on State Road 19, in Putnam County, Florida, approximately one mile south of the Cross Florida Barge Canal. The bid package, signed by C. A. Benedict, District Engineer, for the DOT, specifically reserved the right to reject any and all bids. The bid package broke the work down into three item numbers. The first was mobilization and called for one pricing unit. The second item called for maintenance of traffic at the work site and called for one pricing unit as well. The third area called for restoration of spalled areas (gunite) and called for approximately 437 cubic feet to be priced. In this regard, the plans furnished with the bid package and the bid package itself, in at least three separate locations, called for the bid as to the last item to be priced and paid for on a unit price basis. Petitioner submitted the lowest bid of seven bidders. It was determined to be faulty, however, in that though it properly priced the first two items, it failed to submit a unit price for the third item per unit, submitting instead a total price for the third item based on the entire cubic footage. Petitioner's bid indicated 437 cubic feet priced at a total of $17,832.00. Simple arithmetic permits a division which results in a unit price for each of the 437 cubic feet of $40,805. This last unit price, however, is not reflected on the bid submitted by Petitioner. Petitioner's bid is the only bid of the seven submitted which did not contain a unit price for each of the units in the third item. EDS has been in business since 1980. It performed one previous contract for DOT and is familiar with DOT's rules regarding bidding. It had ample opportunity to examine the plans and the bid blank before submitting its bid and admits that the unit price, though required, was omitted. Petitioner contends, however, that the omission is not a material variance and can be waived by Respondent. Respondent contends, on the other hand, that the failure to list the unit price in the third item is material. This determination is based on the fact that since the bid package calls for payment on a unit basis, the odd one- half cent per unit does not permit even money payment and requires rounding off. Even with this being true, the maximum difference would be one- half cent to be rounded off either upwards or downwards. At some point after opening, at least one of the unsuccessful bidders found out that Petitioner's bid failed to technically conform to the terms of the bid blank and at this point the second lowest bidder, Vann's Sandblasting, whose bid was $4,000.00 higher than that of Petitioner, and who had done several contracts for Respondent in the past, indicated that if petitioner's bid were not rejected, he would file a protest. The one-half cent variance, itself, is not material. Considering all factors, however, the failure to state the unit price may, under certain circumstances, be.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is, therefore: RECOMMENDED THAT Petitioner, EXPLOSIVE AND DIVING SERVICES, INC., be awarded the contract for State project No 76020-3515. RECOMMENDED this 27th day of February, 1985, at Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 FILED with the Clerk of the Division of Administrative Hearings this 27th day of February, 1985. COPIES FURNISHED: Gail S. Wood, President Explosive and Diving Services, Inc. Post Office Box 200 Clarksville, Florida 32430 Larry D. Scott, Esquire Department of Transportation Haydon Burns Building, MS-58 Tallahassee, Florida 32301 Paul Pappas, Secretary Department of Transportation Haydon Burns Building, MS-58 Tallahassee, Florida 32301
The Issue The issue to be decided is which of the Petitioners, based upon a systematic comparison of their relevant characteristics, is the most qualified, relative to the other, to receive a license to operate as a medical marijuana dispensing organization in Florida's southwest region.
Findings Of Fact Respondent Department of Health (the "Department" or "DOH") is the agency responsible for administering and enforcing laws that relate to the general health of the people of the state. The Department's regulatory jurisdiction includes matters arising under the Compassionate Medical Cannabis Act of 2014 (the "Act"). See Ch. 2014-157, § 2, at 1-5, Laws of Fla. (pertinent portions codified as amended at § 381.986, Fla. Stat. (2015)). In brief, the Act provides for the regulation and use of low-THC cannabis. The Act authorizes licensed physicians to order this non-euphoric "medical marijuana" for qualified patients having specified illnesses, such as cancer and other debilitating conditions that produce severe and persistent seizures and muscle spasms. By authority granted in section 381.986(5), Florida Statutes, the Department is responsible for selecting a limited number of cannabis dispensing organizations, distributed territorially, which will operate as something like heavily regulated utilities, each having the primary (though nonexclusive2/) responsibility for one of five regions of the state.3/ Each licensed dispensing organization ("DO") will be authorized to cultivate, process, and sell low-THC marijuana statewide to qualified patients for medicinal purposes. In its original form, the Act contemplated that DOH would appoint one DO per region, so that, initially, there would be only five DOs operating in the state of Florida. Section 381.986(5)(b) prescribes various conditions that an applicant for approval as a DO must meet——which only an established plant nursery business could satisfy——and directs the Department to "develop an application form and impose an initial application and biennial renewal fee." The Act further grants DOH the power to "adopt rules necessary to implement" the legislation. § 381.986(7)(j), Fla. Stat. Accordingly, the Office of Compassionate Use ("OCU") within the Department published and eventually adopted rules under which a nursery could apply for a DO license. Incorporated by reference in these rules is a form of an Application for Low-THC Cannabis Dispensing Organization Approval ("Application"). See Fla. Admin. Code R. 64-4.002 (incorporating Form DH9008-OCU-2/2015). To apply for one of the initial DO licenses, a nursery needed to submit a completed Application, including the $60,063.00 application fee, no later than July 8, 2015.4/ See Fla. Admin. Code R. 64-4.002(5). Petitioner Plants of Ruskin, Inc. ("POR"); Petitioner Tornello Landscape Corp., d/b/a 3 Boys Farm ("3BF"); Alpha Foliage, Inc. ("Alpha"); Perkins Nursery, Inc.; TropiFlora, LLC; and Sun Bulb Company, Inc., each timely submitted an application for licensure as the DO for the southwest region. POR is a Florida corporation that has operated as a plant nursery since 1979. For approximately the last decade, POR's primary focus has been growing tomato plants for sale to farmers for cultivation. 3BF has been registered as a nursey with the Florida Department of Agriculture and Consumer Services for more than 30 years. Robert Tornello has been 3BF's nurseryman throughout its existence. All timely filed applications——numbering around 30 with the five regions combined——were initially reviewed by OCU Director Christian Bax for completeness, as required by section 120.60(1), Florida Statutes. If Mr. Bax determined there were any errors or omissions, he sent the applicant a certified letter identifying the deficiencies and providing a deadline for the applicant to provide additional information or documentation. The failure to submit a complete application establishing that the applicant "meets the requirements of Section 381.986(5)(b)" would result in denial on that basis "prior to any scoring as contemplated in [the applicable] rule." Fla. Admin. Code R. 64-4.002(4). Because both POR's and 3BF's applications were deemed complete (after the submission of timely requested additional information), each nursery advanced to the "substantive review" phase of DOH's free-form decisional process for the selection of the state's first regional DOs. The Department was required to "substantively review, evaluate, and score" all timely submitted and complete applications. Fla. Admin. Code R. 64-4.002(5)(a). This evaluation was to be conducted, again according to rule, by a three-person committee (the "evaluators"), each member of which had the duty to independently review and score each application. See Fla. Admin. Code R. 64-4.002(5)(b). The applicant with the "highest aggregate score" in each region would be selected as the Department's intended licensee for that region. By rule, the Department had identified the specific items that its evaluators would consider during the substantive review. These items are organized around subjects, which the undersigned will refer to as Main Topics. There are five Main Topics: Cultivation; Processing; and Dispensing, see rule 64- 4.002(2)(b); Medical Director, see rule 64-4.002(2)(h); and Financials, see rule 64-4.002(2)(f). In the Application, DOH prescribed a more detailed classification scheme, placing four Subtopics (the undersigned's term) under three of the Main Topics (namely, Cultivation, Processing, and Dispensing), and assigning a weight to each Main Topic and Subtopic, denoting the relative importance of each in assessing an applicant's overall merit. In these regards, the Application states: Cultivation (30%) Technical Ability (4.002(2)(a)) [25%] 2. Infrastructure (4.002(2)(e)) [25%] 3. Premises Resources Personnel (4.002(2)(c)) [25%] 4. Accountability (4.002(2)(d)) [25%] Processing (30%) Technical Ability (4.002(2)(a)) [25%] 2. Infrastructure (4.002(2)(e)) [25%] 3. Premises Resources Personnel (4.002(2)(c)) [25%] 4. Accountability (4.002(2)(d)) [25%] Dispensing (15%) Technical Ability (4.002(2)(a)) [25%] 2. Infrastructure (4.002(2)(e)) [25%] 3. Premises Resources Personnel (4.002(2)(c)) [25%] 4. Accountability (4.002(2)(d)) [25%] Medical Director (5%) Financials (20%) There are, in total, 152 specific items comprising the evaluation criteria, which the undersigned calls Factors. The Factors are discrete, (mostly) evidence-based data points including, among other things, attributes such as "experience cultivating cannabis"; tangible items such as "awards, recognition or certifications received"; disclosures concerning, e.g., personnel, assets, and business plans; and promissory representations about, for example, proposed staffing and projected budgets. Eighteen of the Factors, in turn, have associated Subfactors, which are set forth in the Application. The possession or satisfaction of any individual Factor is not mandatory; as a group, however, they represent the set of all items the Department deems important to consider in selecting applicants for licensure. Thus, applicants are required to address the Factors, if not all of them, in their applications. In the Application, the Factors are organized by Subtopic (where applicable) or Main Topic (in the absence of Subtopics). Thus, there are 14 categories of Factors, four each (due to Subtopics) for Cultivation, Processing, and Dispensing, making 12; plus two: Medical Director and Financials. The undersigned refers to these 14 categories as Domains. Each Domain has a relative weight as determined by the Department. The Medical Director and Financials Domains, having no Subtopics, count 5% and 20%, respectively, towards the computation of an applicant's overall merit. The four Cultivation Domains and the four Processing Domains are worth 7.5% apiece.5/ The four Dispensing Domains are valued at 3.75% each.6/ Unlike the Domains, the Factors are not separately weighted; the Department's evaluators were allowed to use their discretion in applying the Factors, provided they used them "holistically" and exclusively, that is, as a complete system and to the exclusion of other considerations not specified for the Domain under review. To summarize, the Domains, the number of Factors belonging to each, and their relative weights are set forth in the following table: DOMAIN No. of Factors Weight Main Topic Subtopic I. A. Cultivation 1. Technical Ability 14 7.50% II. A. Cultivation 2. Infrastructure 3 7.50% III. A. Cultivation 3. Premises, Resources, Personnel 13 7.50% IV. A. Cultivation 4. Accountability 13 7.50% V. B. Processing 1. Technical Ability 9 7.50% VI. B. Processing 2. Infrastructure 3 7.50% VII. B. Processing 3. Premises, Resources, Personnel 12 7.50% VIII. B. Processing 4. Accountability 15 7.50% IX. C. Dispensing 1. Technical Ability 8 3.75% X. C. Dispensing 2. Infrastructure 8 3.75% XI. C. Dispensing 3. Premises, Resources, Personnel 10 3.75% XII. C. Dispensing 4. Accountability 13 3.75% XIII. Medical Director 17 5.00% XIV. Financials 14 20.0% A larger table that includes the text of each Factor and Subfactor is attached to this Recommended Order as Appendix A. In performing the substantive review of the initial applications filed in 2015, DOH's three evaluators were required to use Form DH8007-OCU-2/2015, "Scorecard for Low-THC Cannabis Dispensing Organization Selection" (the "Scorecard"), which is incorporated by reference in rule 64-4.002(5)(a). The Scorecard is a two-column table that contains, in the left-hand column, a list of all the Factors (divided into separate rows) within each Domain; shows the weight assigned to each Main Topic; and creates, where the right-hand column intersects the row in which a particular Factor is set forth, an empty cell that might be used for recording a score. There are no instructions on the Scorecard. The Department's rules are also silent as to how the evaluators were supposed to score applications using the Scorecard. To fill this gap, the Department devised an extra- rule methodology, which is described in a Memorandum dated September 15, 2015. In that document, the Department's general counsel instructed the evaluators in relevant part as follows: Scoring of the applications is comparative. That is, you compare each application to the others in the particular region for which the license is sought. Applications should be segregated by region and evaluated comparatively. Applications should be scored highest to lowest in each [Domain], as indicated on the attached Sample Scorecard. By way of example, if there are five (5) applicants in a region, the highest rank score is five (5) and the lowest is one (1). The evaluators followed these instructions. Thus, during the substantive review, the evaluators compared competing applicants, sorted by region, so that the applicants for the southwest regional license were graded as one group, those seeking the southeast regional license as another, and so forth. There was no cross-regional comparative review. For each of the 14 Domains, the evaluators ranked the applicants, by regional group, in order of preference, the first-ranked applicant being the one deemed the most desirable of the regional competitors with respect to the Domain in view, followed by the next best, then the third best, etc. In this manner, an applicant would be ranked (by each of three evaluators) in comparison to its regional competitors 14 separate times. In determining the orders of preference within the Domains, there were no external standards against which the applicants were measured. Lacking an objective yardstick for measuring absolute quality, each evaluator needed to determine for himself or herself how persuasively an applicant had demonstrated its possession or satisfaction of (or compliance with) the relevant Factors within the Domain being evaluated, in comparison with the other regional applicants, and then use those findings to decide which applicant was——relatively speaking——the best of the group within that Domain (hereafter, "BGD"). After that, the BGD served, in theory at least, as the benchmark, for the other applicants would be ranked below the BGD in descending order, reflecting the evaluator's judgment about the general direction of the decline in relative quality from the BGD's mark. To be clear, an applicant's being selected as the BGD did not mean that it was "superior" according to any standard defining "superior"; "best" in this instance meant only that the first-ranked applicant was considered better than the others in the group within that Domain. By the same token, to be named, e.g., the second-place applicant did not mean that the applicant necessarily was "excellent" or merely "good"; it meant only that this applicant was less good, in some unknown degree, than the applicant ranked above it. The degree of qualitative difference between any two applicants in the ranking might have been a tiny sliver or a wide gap. The evaluators made no findings with respect to degrees of difference. After ranking the applicants, by regional group, from top to bottom within each Domain, the applicants were "scored" 14 times by each evaluator——according to rank order. Thus, each Domain ostensibly offered an applicant a separate "scoring opportunity." The top score was determined by the number of applications in the region. If there were five applicants, as in the southwest region, then 5 would be the highest score, and the first-ranked applicant would receive 5 points. In a four- applicant field, by way of contrast, the highest score would be 4.7/ The second-place and lower ranked applicants received scores that were 1 point less than the score assigned to the applicant immediately ahead of them in the order of rank. To complete the evaluation process, the evaluators' 14 scores were weighted (using the percentages set forth in the table above), by Domain, and added together to produce a total score per reviewer. A perfect score——5 in this case of the southwest region——would be equal to the number of regional applicants. The reviewers' respective total scores were then combined and averaged to produce an aggregate score, which the Department referred to as the "final rank." The highest "final rank" in the region was awarded the highest "regional rank," which, in a five-applicant field, would be 5. The applicant with the highest regional rank was selected as the intended recipient of the regional license (with one exception that is not relevant here). Under the methodology just described, Alpha achieved the highest regional rank in the southwest region and, accordingly, received notice of DOH's preliminary decision to approve Alpha's application. POR and 3BF, in contrast, each received notices dated November 23, 2015, which assured them that "a panel of evaluators" had "substantively reviewed, evaluated, and scored" their applications "according to the requirements of Section 381.986, Florida Statutes and Chapter 64-4, of the Florida Administrative Code" and gave notice that DOH intended to deny their applications because both were "not the highest scored applicant in the Southwest region." For reasons set forth in brief below——and detailed in the Informational Order on the Multi-Criteria Evaluation of Applications for Approval to Operate As a Dispensing Organization (the "Info-Order"),8/ which was issued on September 8, 2016——DOH did not actually score the applications, as required by rule 64-4.002(5)(a); it merely ranked them. A ranking determines an item's position within a set of items, as, for example, 1st, 2nd, 3rd. Numbers which designate the respective places (ranks) occupied by items in an ordered list are called ordinal numbers. A score, in contrast, is "a number that expresses accomplishment (as in a game or test) or excellence (as in quality) either absolutely in points gained or by comparison to a standard." See "Score," Merriam- Webster.com, http://www.merriam-webster.com (last visited May 3, 2017). Scores are expressed in cardinal numbers, which show quantity, e.g., how many or how much. When used as a verb in this context, the word "score" plainly means "to determine the merit of," or to "grade," id., so that the assigned score should be a cardinal number that tells how much quality the graded application has as compared to the competing applications. As stated above, the Department's "scoring" methodology assigned to first place (most preferred) in any series a "score" equal to the ordinal number denominating the last place (least preferred) in the series, e.g., 5 if there were five applicants under review, and to each place below 1st a "score" that was one point less than that given to the immediately preceding rank. In other words, an applicant's "score" for a given series was simply its ordinal position in the series, inverted. Thus, the evaluators did not rank applicants by score for each Domain, nor did they score any application; instead, they scored each applicant's rank, per Domain, with a fixed and predetermined value, i.e., a number between 1 and x, where x equaled the total number of applications being comparatively evaluated for a given region. Thus, the evaluators automatically assigned the maximum score (100% of the points available) to the BGD; 80% of the maximum score to the second-place applicant (if, as here, x = 5); to the one after that, 60%; then 40%; and finally 20%.9/ These scores did not reflect the relative merit of each applicant as compared to the BGD. Indeed, because degrees of qualitative difference were not important to the evaluators in making their determinations regarding relative quality, as Mr. Bax testified without contradiction at hearing, no findings concerning how much quality an applicant offered in relation to the others with which it was competing were required of, or made by, them. Yet, without such findings, no genuine score could be assigned. The Department's process gave the impression of scoring, without accomplishing the reality of scoring, because a score of 4, say, did not mean that the second-ranked applicant was judged to be 25% inferior to (or 80% as good as) the BGD in a five-applicant field. Nor did a score of 1 mean that the last-ranked applicant per Domain was found to be 400% worse than the BGD. If the qualitative difference between the BGD and the fifth-place applicant (although actually unknown) were 10%, for example, meaning that the last-ranked applicant was 90% as good as the BGD, fifth place (out of five) would still get only 20% of the points. Whether intentional or not,10/ the Department's scoring methodology imposed predetermined, artificial degrees of qualitative separation between the applicants, creating deceptive numerical margins having no rational relationship to actual qualitative proximities, which latter were not determined by, and thus were unknown to, the evaluators. The imposition of fixed, across-the-board scoring margins between adjacent positions in the evaluators' orders of preference was arbitrary because it placed specific values on unknown quantities. DOH's reliance upon arbitrary scores to determine the winners in a multi-criteria evaluation featuring 14 separately-weighted categories makes the results of its substantive review of the applications unreliable. It is unlikely that the five applicants originally chosen by the Department actually were, as a group, "the [five] most qualified Applicants." Application, at 1. This is important because the Department has taken the position that its preliminary rankings of the applicants are not to be treated as matters of fact up for grabs in a de novo hearing, but rather as presumptively correct, "policy-infused" findings of fact entitled to some measure of deference. The Department's legal arguments, which are rejected, will be dealt with later.11/ For now, at the risk of belaboring the point, the undersigned will illustrate how the Department's arbitrary scoring methodology fatally undermines its preliminary rankings, which would not survive even the most deferential standards of review. Suppose that after scoring hypothetical applicants on the first 13 Domains, an evaluator using DOH's scoring methodology has applicants A and B in first and second place, in a five-applicant field, with respective scores of 3.625 and 3.575.12/ The last Domain (Financials), worth 20%, will determine the winner. Imagine that the evaluator ranks B as the best of the group in Domain XIV, while putting A in 3rd place, behind C. Under the Department's system, B wins, edging A with a score of 4.575 to 4.225. Imagine, now, the same facts, but with one difference. Instead of using the Department's methodology, the evaluator quantifies his judgments regarding the degrees of difference in quality between the applicants and awards points based on these qualitative assessments rather than on each applicant's place in his order of preference.13/ The evaluator's order of preference in Domain XIV, again, is B, C, A, but he considers all three applicants to be very close in quality——nearly indistinguishable, in fact——deeming C to be 98% as good as B, and A 96% as good. The qualitative space between adjacent positions among the top three applicants, in other words, is actually 2% instead of the arbitrary 20% that the Department's methodology imposes. As a result, 0.96 points are added to A's cumulative total, 1.00 to B's, and 0.94 to C's. In this scenario, A wins despite its 3rd-place ranking in Domain XIV, beating B in a photo finish, 4.585 to 4.575. As this illustration demonstrates, the more qualified- in-fact applicant, A, would lose under DOH's system, which irrationally awards points based on arbitrarily imposed qualitative spaces between applicants, magnifying the effects of very small differences in actual relative quality, while minimizing the effects of large ones. This flaw would fatally distort the results of any multi-criteria, multi-category evaluation, but it is grossly influential where the categories are separately weighted——here, from 3.75% to 20%——because DOH's methodology is capable of transforming narrow qualitative differences-in-fact (especially in the heavier weighted Domains) into wide scoring margins, and vice versa. These dynamics operated under the radar to affect the outcome of the substantive review of applicants for the southwest region's DO license. It is impossible to know whether Alpha would have ended up with the highest aggregate score if the evaluators had awarded points based upon some reasonable measurement of actual relative quality. All we can be sure of is that the evaluators' scores reflect artificial gaps in relative quality predetermined by a procrustean scheme that fixed the degree of difference between adjacently ranked applicants at a constant margin, e.g., 20%, derived from the number of applicants for the region——a datum wholly unrelated to quality.14/ Because this is not a review proceeding, and because the Department's scoring of the applicants was, in any event, clearly erroneous, arbitrary, capricious, or an abuse of discretion, it has fallen to the undersigned, as the trier of fact in this de novo hearing, to perform a substantive review of POR and 3BF's applications for the purpose of determining which of these, the last remaining competitors for the southwest region's DO license, is in fact, the most qualified applicant.15/ In so doing, as promised in the Info-Order, the undersigned has followed the statutes and existing rules pertaining to the comparative evaluation of applicants, to the extent such laws are applicable in this formal hearing. Accordingly, the undersigned used the 14 Domains, giving them, respectively, the weights assigned by the Department. Likewise, the undersigned used the Factors just as the Department said it did. Because, however, as explained above, the Department's scoring methodology violates the plain language of rule 64- 4.002(5) and cannot reliably achieve the stated goal of selecting the most qualified applicant,16/ the undersigned was compelled to score the applications differently, i.e., in the true sense of the word, so that the degrees of difference between the competitors could be taken into account in the assignment of points. This required that findings of fact be made concerning the degrees of qualitative difference between POR and 3BF as to each Domain. Early in the process the undersigned learned that determining a BGD without an external benchmark was just too undisciplined to be workable. The temptation would be to overvalue some Factors, overlook others, consider undisclosed criteria, and finally resort to making gut decisions about which applicant was better and by how much. So, it was decided that the applicants would be awarded Individual Performance Points ("IPPs") for every Factor, with each score reflecting the undersigned's ultimate factual determination concerning how well the applicant, considered independently of others, performed vis-à-vis that Factor as measured against a constructed scale (described below). For each Domain, an applicant's IPPs were added to produce a Composite Score.17/ The Composite Scores would be compared, and the applicant with the highest Composite Score would be deemed the BGD. The BGD's Composite Score for the Domain then became, for purposes of the comparative review, the perfect score, entitled to 100% of the Relative Quality Points ("RQPs") available for the Domain in question. For simplicity's sake, the undersigned had decided that there should be a grand total of 100 RQPs available, so that the maximum number of RQPs awardable per Domain would equal each Domain's relative weight in DOH's scheme. Domain I.A.1, for example, has a relative weight of 7.5%. Thus, the BGD for that Domain would receive a Domanial Score of 7.5 RQPs. 50 The second-place applicant per Domain received a scaled percentage of the maximum number of RQPs available for the Domain in question. If the BGD's Composite Score were 50, for example, and the other applicant's 45, then the second-place applicant would receive 90% of the RQPs available for the Domain——90% reflecting the magnitude-of-difference ratio ( 45) between the two competitors. Thus, if the maximum Domanial Score were 7.5, this applicant would receive a Domanial Score of 6.75 RQPs. After scoring both applicants, their Domanial Scores were totaled to produce a Regional Score for each. The applicant with the highest Regional Score would be the most qualified applicant in the field. As mentioned above, the undersigned found it necessary to construct a rating scale because experience taught that it is a fool's errand to try to choose——without a frame of reference—— the better of two applicants who have responded to the Factors using (oftentimes) different but reasonable approaches. Indeed, the nature of the Factors is such that, in many instances, the question of whether one applicant's response is "better" than another's largely comes down to personal preference, so that formulating an answer is like deciding which fast food chain makes a better hamburger——except more difficult, because we are evaluating what are, essentially, startup companies aiming to enter a newly created, heretofore illegal market. Ordinarily, the market would decide, based on collective experience accumulated over time, which company provides the better combination of products and services; here, however, someone (or some limited number of persons) must decide, in advance, for the market. In exercising such a heavy responsibility, the decision maker(s) should endeavor to minimize the influence of rank subjectivity. So, as a means of making the required decision pursuant to a logical method, the undersigned devised the following seven-level18/ scale: IPPs RATING SCALE Level (Points) Description 5 Proved not only the existence or satisfaction of, or compliance with, the Factor, but also mastery or preeminence (if, e.g., knowledge, experience, or qualifications), or "state of the art" quality or development (if, e.g., device, technique, facility). 4 Proved not only the existence or satisfaction of, or compliance with, the Factor, but also excellence or expertise (if, e.g., knowledge, experience, or qualifications), or exceptional quality or development (if, e.g., device, technique, facility). 3 Clearly proved the existence or satisfaction of, or compliance with, the Factor, leaving little or no reasonable doubt. 2 Proved the existence or satisfaction of, or compliance with, the Factor, persuasively but not forcefully. 1 Proved the partial, but not complete, satisfaction of, or compliance with, the Factor. 0 No response, nonresponsive, or failed to prove the existence or satisfaction of, or compliance with, the Factor. NC (2.5)19/ Not contested, i.e., no applicant identified this Factor as a potential point of preference. In awarding IPPs to the applicants for each of the Factors, the undersigned considered all the relevant evidence in the record, resolved conflicts therein, if any, to ascertain the relevant historical, objective, or empirical facts, and made determinations of ultimate fact concerning the level to which, in the scale above, an applicant's response to a particular Factor rose. Each IPP score, therefore, numerically expresses an ultimate fact representing the culmination of a rigorous deliberation. These ultimate facts are set forth in the scoresheet attached as Appendix B to this Recommended Order. The undersigned readily acknowledges that the ultimate facts set forth in Appendix B are not falsifiable. The reality is that no one could perform this evaluation to the satisfaction of all reasonable observers. Indeed, there are likely few individual IPP scores that are beyond reasonable dispute, to say nothing of the outcome itself. That is simply the irreducible nature of the case. If the undersigned were to burden this Recommended Order with explanations of each scoring decision, therefore, those dissatisfied with the result could easily pick them apart, while others could just as easily find ample support for them in the record. The game's not worth the candle. The table below shows the Domanial and Regional Scores for POR and 3BF: DOMANIAL SCORES POR 3BF Domain I.A.1 6.52 7.50 Domain II.A.2 7.50 6.56 Domain III.A.3 6.65 7.50 Domain IV.A.4 7.50 7.28 Domain V.B.1 5.94 7.50 Domain VI.B.2 7.50 7.50 Domain VII.B.3 6.75 7.50 Domain VIII.B.4 7.50 7.31 Domain IX.C.1 3.75 3.41 Domain X.C.2 3.75 3.75 Domain XI.C.3 3.75 3.47 Domain XII.C.4 3.75 3.53 Domain XIII.D 4.70 5.00 Domain XIV.E 20.00 18.31 95.56 REGIONAL SCORES 96.12 3BF is the apparent "winner" by 0.56 RQPs. This margin of victory, however, reflects a false precision. The Regional Scores are reported above as numbers having two decimal digits, to the hundredths place. These numbers to the right of the decimal point are spurious digits introduced by calculations carried out to greater precision than the original data, the IPPs, which were awarded in whole numbers (unless the Factor was not contested). The Domanial Scores could not possibly have been more precise than the underlying IPP scores having the least number of significant figures in the equation, and these were always one-digit integers (with the unusual exception of Domain VI.B.2, where each applicant received straight 2.5s because no Factor was contested). To eliminate the false precision, the spurious digits should be rounded off. This produces a tie score of 96-96. The undersigned therefore determines as a matter of ultimate fact that there is no meaningful qualitative difference between POR and 3BF when they are comparatively evaluated using the prescribed weighted Domains and unweighted Factors. Both POR and 3BF are qualified for licensure, for each meets the requirements set forth in section 381.986(5)(b). It is unnecessary to make findings of fact regarding the applicants' satisfaction of these conditions because DOH never gave timely notice of intent to deny either party's application for failing to demonstrate that it had the necessary abilities, infrastructure, or personnel.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: The Department of Health consider whether, in the exercise of newly acquired constitutional authority, it may license both Plants of Ruskin, Inc., and Tornello Landscape Corp., d/b/a 3 Boys Farm, as MMTCs; and then consider exercising such authority, if thought to exist, because there is no meaningful qualitative difference between these applicants, as a matter of ultimate fact. If the Department chooses not to license both applicants as MMTCs, then a final order should be entered approving the application of Tornello Landscape Corp., d/b/a 3 Boys Farm, whose score of 96.12 is the highest, if only by a mathematically insignificant margin. DONE AND ENTERED this 23rd day of May, 2017, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 23rd day of May, 2017.
The Issue Whether the Florida Department of Health’s (“Respondent” or “Department”) determination that Tallahassee Corporate Center, LLC (“Petitioner” or “TCC”) submitted a nonresponsive reply to the Department’s Invitation to Negotiate (“ITN”) No. 640:0040 is contrary to the Department’s governing statutes, rules, policies, or the solicitation specifications; and, if so, whether the decision was clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact The ITN The Department is a state agency that seeks space for administrative offices, a call-center facility, and claimant hearings. The Department currently leases office space from TCC, which lease expires on October 31, 2019. On July 19, 2017, the Department issued the ITN seeking vendors that could provide 135,815 square feet of office space for lease. The Department issued one addendum to the ITN on September 1, 2017, deleting a requirement that the space be contiguous within a single building. There were no challenges to the terms, conditions, or specifications contained in either the ITN or the amendment thereto.4/ Both TCC and TRV are potential lessors which submitted replies to the ITN. The ITN includes a provision expressly reserving the Department’s “right to negotiate with all responsive and responsible Proposers, serially or concurrently, to determine the best-suited solution.” (emphasis added). The term “Proposer” is defined in the ITN to mean “the individual submitting a Reply to this [ITN], such person being the owner of the proposed facility or an individual duly authorized to bind the owner of the facility.” This reservation of rights placed interested lessors on notice that only responsive proposers could be invited to negotiations. The Department seeks to lease space in either an existing building or a building to be constructed in the future. In the Introduction, the ITN describes the proposals requested as follows: The [Department] is seeking detailed and competitive replies to provide built-out office facilities and related infrastructure for occupancy by the [Department]. As relates to any space that is required to be built-out pursuant to this [ITN], see Attachment “A” which includes the [Department] Specifications detailing the build-out requirements. The proposed facility may be within an existing building or a non-existing building designed as a Build-to-Suit to meet the [Department] Specifications. The specifications in Attachment A provide the basic requirements for the potential leased space, including the required type, number, and square feet of each space (i.e., office, workstation, conference room, storage), as well as the voice and data requirements for each space. The ITN provides that Attachment A “is an integral part of this ITN.” Section III.A. of the ITN details the requirements for responsive replies, including documentation demonstrating control of the property, a floor plan to scale, and return of each ITN page with the proposer’s initials. In addition, for Build-to- Suit proposals, responsive replies must include the proposed site plan, and may include building renderings.5/ Section IV. provides the Lease Terms and Conditions, and requires replies to indicate whether the proposer will meet each term and condition by marking either a “Yes” or “No” option with an “X.” Section IV.B. provides that the space must be made available for occupancy on September 1, 2019. This section emphasizes the importance of timely occupancy, requiring submission from the Lessor to the Tenant Broker of items to assure same, such as the sample construction project schedule, documentation of construction inspections, a performance bond, and proposed and final floor plans. Section IV.B. is not limited in applicability to Build-to-Suit leases. In fact, Section IV.B. provides that, for build-to-suit leases, the lessor must also provide architectural design and construction plans to the Department of Management Services for prior approval. Section IV.G. is titled “Space Availability – Turn-Key Build Out,” and requires as follows: The State requires a “turn-key” build-out by the Lessor. Therefore, Proposer shall assume all cost risks associated with delivery in accordance with the required space program specifications detailed in Attachment A. Proposer agrees to provide a “turn-key” build-out in accordance with the space program specifications detailed in Attachment “A” following the [Department]’s approval of an architectural layout provided by the Proposer: YES or NO “Turn-key” is a term of art in the commercial leasing industry meaning to deliver a space to the lessee which can be occupied immediately. The turn-key requirement is applicable to both build-out of an existing facility and build-to-suit new construction. By the terms of the ITN, the requirement for a turn- key build-out applies to all proposers, and is not restricted to proposers offering a build-to-suit option. TCC’s Reply TCC submitted a proposal for an existing building, the very building in which the Department currently leases space for the functions described in the ITN. Item IV.G In its reply, TCC responded “NO” to the statement “Proposer agrees to provide a ‘turn-key’ build-out in accordance with the space program specifications detailed in this Attachment A following the [Department]’s approval of an architectural layout provided by the Proposer.” In the space between Items IV.G. and IV.H., TCC added the following typewritten language: 10 Year Term – TI Allowance capped at $7 psf ($3.50 psf beginning year 1/$3.50 psf after year 5) 15 Year Term – TI Allowance capped at $10 psf ($5 psf beginning year 1/ $5 psf after yr. 5). In an apparent effort to explain the interlineated text in its reply, TCC also submitted an “Additional Response” sheet with its ITN reply, which reads as follows: ITN:640:0400 Additional Response Attachment A/[Department] Specification As the current Landlord for the [Department], our response proposes a “Stay In Place” option. Under this option, we propose a Tenant Improvement Allowance in order for the [Department] to address any Tenant Improvements necessary. With [Department] currently occupying the space, it would be impossible to ask them to move out of its existing office space in order to meet the requested [Department] Specifications in Attachment A. A “stay-in-place” offer is also a term of art in the commercial leasing industry which references negotiations between an existing lessee and lessor for a new lease of the space currently occupied by the lessee. The terms of the ITN are clear: the Department is seeking to negotiate with all proposers which agree to meet its space program specifications. TCC’s representative, Todd Hakimi, testified (both in his deposition and at final hearing), that TCC’s reply offered a stay-in-place option, rather than a turn-key or build-to-suit lease. Mr. Hakimi further testified that he formulated the response to the ITN on his understanding that the space currently leased to the Department by TCC was satisfactory to the Department, thus no buildout of the space was necessary to comply with the ITN. Mr. Hakimi’s testimony is belied by TCC’s supplemental response explaining that it would be impossible to ask the Department to “move out of its existing office space to meet the requested Agency Specifications in Attachment A.” In the supplemental response, TCC admits that the Department is seeking space which meets specifications not met by the existing office space. TCC’s reply was nonresponsive. By responding “No” to Item IV.G., TCC indicated it would not comply with the Department’s space program specifications in Attachment A, which is an integral and material component of the ITN. Tenant Improvement Allowance Instead, TCC’s reply offered a Tenant Improvement Allowance (“TIA”), shifting the burden to the Department to meet its space program requirements, rather than providing a “turn- key” space on September 1, 2019. Moreover, TCC’s reply “capped” the TIA at a per- square-foot amount, essentially limiting the amount TCC would pay toward the space program requirements set forth in Attachment A. In doing so, TCC refused to “assume all cost risk associated with delivery in accordance with the space program specifications” as required by Item IV.G.6/ If accepted, Petitioner’s response would give TCC a competitive advantage over other responders who agreed to “assume all cost risk associated with delivery in accordance with the space program requirements.” Broker Commission Item IV.J., another mandatory lease condition, requires lessors to agree to execute a Commission Agreement, which was attached to the ITN as Attachment G, another integral and material component of the ITN: Proposer acknowledges review of the Commission Agreement (Attachment G). Proposer agrees to execute and be bound by the Agreement should the Proposed Space be selected by the [Department]. YES or NO The Commission Agreement includes a schedule for the commission rate based on the total aggregate gross base rent that could be paid ranging from 3.50 percent on the first $500,000 of base rent to 2.50 percent on the base amount of $8.5 million and over. TCC checked “YES” in response to Item IV.J., but contradicted that reply by adding “Agree to 2% commission.” Mr. Hakimi testified that he offered a two-percent commission because he viewed his reply to the ITN as a renewal of the current lease, and it is customary to give a lower broker commission for renewal than for a new lease. The Department was not seeking a renewal lease. The ITN sought proposals to meet the agency space program specifications either within an existing building or at a build- to-suit location. TCC refused to be bound by this material term of the ITN, thus TCC’s reply was nonresponsive. If accepted by Respondent, TCC’s lower broker commission rate would have given TCC a competitive advantage over other proposers. Control of Property The ITN also provided that to be responsive, each lessor was required to submit documentation demonstrating the lessor’s control of the property proposed for the leased space: Replies must completely and accurately respond to all requested information, including the following: (A) Control of Property (Applicable for Replies for Existing and/or Non-Existing Buildings). For a Reply to be responsive, it must be submitted by one of the entities listed below, and the proposal must include supporting documentation proving control of the property proposed. * * * The owner of record of the facility(s) and parking area(s) – Submit a copy of the deed(s) evidencing clear title to the property proposed. * * * The authorized agent, broker or legal representative of the owner(s) – Submit a copy of the Special Power of Attorney authorizing submission of the proposal. The Special Power of Attorney form was attached to the ITN as Attachment H, another integral part of the ITN. Section K of the ITN clearly states, “Attachment H . . . is required if submitting on behalf of owners.” Attachment D to the ITN was a Disclosure Statement which solicited from proposers information about the ownership of the property, including the name of the titleholder, as well as the titleholder’s social security number or federal employer identification number, as applicable. TCC’s reply contained a blank Attachment D. TCC’s reply included a deed identifying DRA CRT Tallahassee Center, LLC (“DRA CRT”), as the owner of the property offered for lease. TCC’s reply was executed by TCC President, Lyda Hakimi. TCC did not execute Attachment K or include an executed power of attorney to demonstrate that TCC has control of the property on behalf of DRA CRT. TCC owns DRA CRT, but the two are different legal entities. In order to demonstrate control of the property owned by DRA CRT, TCC was required to execute Attachment K or otherwise provide a power of attorney to demonstrate authority to bind the owner to TCC’s proposal. TCC’s reply did not demonstrate control of the property as required by the ITN. TCC’s reply was not responsive on this issue. Waivable Minor Irregularity TCC contends that its failure to include an executed power of attorney was a minor irregularity which should have been waived by the Department. TCC’s argument is twofold. First, TCC maintains that the Department had actual knowledge that TCC was DRA CRT’s agent because the Department was currently leasing the property from TCC. Second, TCC maintains that proposals by other responders failed to establish control of the property, but were nevertheless deemed responsive by the Department.7/ TCC’s first argument is not persuasive. As discussed in the Conclusions of Law, the undersigned’s role is not to make independent findings based on the evidence of record, but to determine whether the Department’s failure to waive the minor irregularity was arbitrary, capricious, or clearly erroneous. In support of its argument that the Department acted arbitrarily in its determination that TCC was nonresponsive on the issue of control of the property, TCC introduced, over strenuous objection, the ITN response from TRV and two separate responses from OAG Investment 3, LLC (“OAG”). TRV’s reply reveals TRV is the owner of the property. TRV’s proposal is executed by John McNeill as “Advisor” to TRV, and includes an executed Attachment H, Special Power of Attorney, from John Abernathy granting power of attorney to Mr. McNeill to act on his behalf regarding the ITN. TCC complains that TRV’s proposal does not demonstrate the relationship between TRV and Mr. Abernathy or establish Mr. Abernathy’s authority to grant a power of attorney on behalf of TRV. Thus, TCC argues, TRV’s reply suffers from the same defect as its own--failure to demonstrate control of the property--so the Department acted arbitrarily in failing to waive that nonconformity for TCC. Petitioner’s argument is not well-taken because the facts are distinguishable. First, as to TRV’s response, TRV is both the owner of the property and the proposer for the ITN. In contrast, TCC is the proposer, but not the owner of the property. Second, TRV’s reply documents, on Attachment D, establishes Mr. Abernathy’s authority “to conduct business as a representative of” TRV. TRV’s reply included the required deed evidencing ownership, as well as a completed Attachment D Disclosure, and Attachment H Special Power of Attorney. By contrast, in TCC’s reply, it neglected to complete either Attachment D or Attachment H. TCC made no effort to document the proposer’s authority to bind the property owner to the terms of the ITN. The facts relating to TRV’s reply are not sufficiently similar to TCC’s for the undersigned to conclude that the Department acted arbitrarily in failing to waive TCC’s nonconformity relating to control of the property. The same applies to the proposals from OAG. OAG’s reply for property on Barcelona Lane shows ownership of the property by the Townsend Mary D. Trust (“Trust”) and a purchase and sale agreement between the Trust and OAG executed by Mary Townsend on behalf of the Trust. TCC first complains that the Trust holds the property by a Quit Claim Deed, which “does not prove title or control.” Second TCC alleges that the reply does not establish Mary Townsend’s authority to execute the purchase and sale agreement on behalf of the Trust. As to OAG’s reply for the Mahan Drive property, TCC complains that the warranty deed identifies ownership of only a 30-percent interest in the property, and the purchase and sale agreement to OAG is from six named individuals, one of whom is noted as a trustee of an unidentified trust, and only three of whom have an ownership interest in the property based on the deed submitted. It is beyond the undersigned’s authority to determine whether OAG’s replies establish control of the property per the ITN specifications. The only purpose for which the TRV and OAG replies were admitted was to rebut the Department’s assertion that TCC’s reply was nonresponsive on the issue of control of the property. The factual differences between TCC’s documentation of ownership and control and those of the OAG proposals, do not support a finding that the Department acted arbitrarily in failing to waive the nonconformity.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health enter a final order dismissing Tallahassee Corporate Center, LLC’s Petition. DONE AND ENTERED this 31st day of May, 2018, in Tallahassee, Leon County, Florida. S SUZANNE VAN WYK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 31st day of May, 2018.
The Issue Whether the Department of Transportation can reject all bids on State Project No. 37906-9007?
Findings Of Fact In response to an invitation to bid, petitioner C & S Chemical Company (C&S) submitted a bid, No. 9059-86, offering to undertake complete maintenance operations to ensure Rest Area facilities located on State Road 93 (1-75) in Suwannee and Hamilton Counties are maintained in a safe, attractive, clean and sanitary manner." Respondent's Exhibit No. 1. Invitations to bid were mailed in October of last year, (T.9), and bids were to have been opened on December 2, 1987. C&S's bid price was $14,860.76 monthly or $178,329.12 for the year. By letter dated December 9, 1986, however, the Department of Transportation (DOT) advised C&S that all bids had been rejected, stating that the "Department reserved the right to reject any/or all bids when it is determined to be in the best interest of the Department. Petitioner's Exhibit No. 1. C&S mailed notice of protest the same day it received the Department's advice that all bids had been rejected. C&S's formal written protest took the form of a letter, dated December 18, 1986, in which C&S inquired: [H]ow can the Department of Transportation offend and deprive legitimate contractors of this work by negotiating a Contract with a non-profit organization after the bid prices have been made public knowledge? Petitioner's Exhibit No. 2. In this letter, C&S took the position that DOT should not reject all bids: We feel that if the non-profit organizations are going to get Department of Transportation contracts, they should either bid compet[i]tively with private enterprises, or that certain contracts should be set aside for them well advance of the bidding process. At hearing, Mr. Sperring narrowed or clarified the grounds of the protest when he stated, "I have no objection to the concept of the nonprofit organizations as long as they are set aside," (T.12) before bids are invited. The parties agree that, after bids were solicited, DOT decided to award the contract for Project No. 37906-9007 to intervenor Florida Association of Rehabilitative Facilities, Inc. (FARF), even though FARF never bid on the project. By agreement dated August 21, 1985, the Commission for Purchase for the Blind and other Severely Handicapped designated FARF "the central nonprofit agency of the Commission . . . [and its] sole agent." Intervenor's Exhibit No. 2. The day before, DOT Secretary Thomas E. Drawdy had signed a policy statement proclaiming DOT's intention "to procure commodities or services from qualified nonprofit agencies for the blind or other severely handicapped when feasible unless otherwise restricted by budgetary constraints." Intervenor's Exhibit No. 1.
